Rhetoric in international standard setting process: constructing accounting reality

The paper seeks to explore in depth the ways in which rhetorical strategies are employed in the international accounting standard setting process. The study proposes that rather than simply detailing new accounting requirements, the texts and drafts of accounting standards are artefacts, i.e. deliberately and carefully crafted products, that construct, persuade and encourage certain beliefs and behaviours. The persuasive and constructive strategies are also employed by the constituents submitting comment letters on the regulatory proposals. Consequently, the international accounting standard setting process is an ‘interactive process of meaning making’ (Fairclough, 1989). The study regards accounting as a social construct based on intersubjectivity (Searle, 1995; Davidson, 1990, 1994) and posits language as a constitutive factor in the process (Saussure, 1916; Peirce, 1931-58). This approach to the use of language and the role of rhetoric as a persuasive tool to convince others to our perception of ‘accounting reality’ is supported by the sociological work of Bourdieu (1990, 1991). Bourdieu has drawn our attention to how language becomes used, controlled, reformed and reconstituted by the social agents for the purposes of establishing their dominance. In our study we explore in particular the joint IASB and FASB proposals and subsequent regulations on the scope of consolidation and relevant disclosures that address issues of off-balance sheet financing, a subject that is very timely and of great topical importance. The analysis has revealed sophisticated rhetorical devices used by both the Boards and by the lobbyists. These reflect Aristotelian ethos, pathos and logos. The research demonstrates that those using accounting standards as well as those reading comment letters on the proposals for new standards should be aware of the normative nature of these documents and the subjectivity inherent in the nature of the text.

The end of the opportunism vs trust debate: bounded reliability as a new envelope concept in research on MNE governance

Modern transaction cost economics (TCE) thinking has developed into a key intellectual foundation of international business (IB) research, but the Williamsonian version has faced substantial criticism for adopting the behavioral assumption of opportunism. In this paper we assess both the opportunism concept and existing alternatives such as trust within the context of IB research, especially work on multinational enterprise (MNE) governance. Case analyses of nine global MNEs illustrate an alternative to the opportunism assumption that captures more fully the mechanisms underlying failed commitments inside the MNE. As a substitute for the often-criticized assumption of opportunism, we propose the envelope concept of bounded reliability (BRel), an assumption that represents more accurately and more completely the reasons for failed commitments, without invalidating the other critical assumption in conventional TCE (and internalization theory) thinking, namely the widely accepted envelope concept of bounded rationality (BRat). Bounded reliability as an envelope concept includes two main components, within the context of global MNE management: opportunism as intentional deceit, and benevolent preference reversal. The implications for IB research of adopting the bounded reliability concept are far reaching, as this concept may increase the legitimacy of comparative institutional analysis in the social sciences.

The impact of added cultural distance and cultural diversity on international expansion patterns: a Penrosian perspective

International strategy research has identified a variety of multinational enterprise (MNE) expansion patterns. Some MNEs appear to expand internationally at a stable rate, whereas others expand rapidly in one period and then tend to experience slower growth. The latter pattern suggests the occurrence of the Penrose effect. We identified two determinants of these diverging patterns. First, we propose that high levels of added cultural distance (reflecting expansion into new local contexts) during one period, may negatively affect further international expansion because of dynamic adjustment costs. Second, we suggest that managing a network of subsidiaries operating in a set of local contexts with high cultural diversity, increases environmental and internal governance complexity. Extant cultural diversity of the local contexts where the MNE is active in a first period may therefore discourage adding further cultural distance. We test the hypothesized relationships using a panel of 91 German companies.

The STRATADAPT scale: a measure of marketing strategy adaptation to international business markets

Purpose – The development of marketing strategies optimally adjusted to export markets has been a vitally important topic for both managers and academics for about five decades. However, there is no agreement in the literature about which elements integrate marketing strategy and which components of domestic strategies should be adapted to export markets. The purpose of this paper is to develop a new scale – STRATADAPT. Design/methodology/approach – Results from a sample of small and medium-sized industrial exporting firms support a four-dimensional scale – product, promotion, price, and distribution strategies – of 30 items. The scale presents evidence of composite reliability as well as discriminant and nomological validity. Findings – Findings reveal that all four dimensions of marketing strategy adaptation are positively associated with the amount of the firm's financial resources allocated to export activity. Practical implications – The STRATADAPT scale may assist managers in developing better international marketing strategies as well as in planning more accurate and efficient marketing programs across markets. Originality/value – This study develops a new scale, the STRATADAPT scale, which is a broad measure of export marketing strategy adaptation.

Building post crisis watchtowers: investment management Systems and new institutional logics for regulatory compliance

The financial crisis of 2007-2009 has precipitated large scale regulatory change. Tight deadlines for implementation require organizations to start working on remediation projects before final drafts of regulations are crystalized. Firms are faced with engaging in complex and costly change management programs at a time when profits are diminished. As a consequence of these factors, pre-crisis logics for organizing compliance practices are being questioned and new approaches introduced. Our study explores the use of Investment Management Systems (IMS) in facilitating compliance arrangements. Our motivation is to understand the new logics and the part played by IMS in supporting these approaches. The study adopts an institutional logics perspective to explore the use of such systems at eight financial organizations. The study found new logics for organizing compliance include consolidation, centralization, harmonization and consistency and that the IMS plays an important role in supporting and enabling related activities.

Addressing rural social exclusion through African social purpose ventures

Objectives. The overarching aim of this paper is to consider the relationship between social entrepreneurship and rural development, and as a mechanism to address social exclusion in the Global South, with specific reference to Sub-Saharan Africa. Drawing upon a number of case examples of social purpose ventures in Kenya, Mozambique and Zambia the objectives of this paper are: - To provide a synthesis of existing literature on the interaction between social purpose ventures and rural BoP communities in the developing world; - To explore extant social exclusion literature including economic, political and international development dimensions; and - To analyse the case study examples to consider the channels through which social purpose ventures contribute to tackling social exclusion amongst the rural BoP. Prior Work. There is growing interest in the role that social enterprises and wider social purpose ventures can play in sustainable development in the Global South. In many developing countries the majority of the population still reside in rural areas with these areas often particularly marginalised and underdeveloped. Previous studies have provided anecdotal examples where social purpose ventures have the potential to provide innovative solutions to the development challenges faced by rural households and communities. Yet research in this area remains relatively nascent and fragmented. In depth empirical studies examining social purpose ventures and rural development in the Global South are furthermore limited. Approach. Data was collected during in-depth case study research with social purpose ventures in Zambia, Kenya and Mozambique. Cases were selected through a purposive sample with access negotiated to rural BoP communities through gatekeeper partners. Qualitative research methods were primarily employed including interviews, stakeholder focus groups and observational research. Results Six channels through which social purpose ventures contribute to tackling social exclusion amongst rural BoP communities are identified. These include ventures with the BoP as employees, producers, consumers, entrepreneurs, service users and shareholders. A number of shared characteristics for successful social purpose ventures are also outlined. Finally implications for policy, practice and research are discussed. Implications. Despite the increasing attention being given to social purpose ventures as a mechanism for global sustainable development many questions remain unanswered. Limited empirical work has been undertaken on such ventures operating in rural settings in the developing world, particularly Africa. The paper will add to academic and practitioner knowledge in this area especially in relation to up-scaling impact, the long term sustainability and viability of social purpose enterprise ventures, and effective supporting interventions. This paper adds to knowledge in the field of social purpose venturing in the developing world. It identifies various channels through which such ventures help tackle rural social exclusion and also factors influencing their success. The paper provides insights for practitioners and policy makers, particularly in relation to facilitating successful social purpose venturing. Value This paper will provide insights relevant to both academic and practitioner audiences. It addresses a subject area and geographical region that has received limited research attention to date. The paper adds to knowledge on social purpose ventures and social entrepreneurship in Africa and wider developing world environments, and contributes to debates on its potential and present limitations as a vehicle for development and societal transformation

Globalization and new policy concerns: the WTO and the EU's sustainability criteria for biofuels

The transfer of some decision-making authority from the domestic to the supranational arena as a result of the establishment of the World Trade Organization (WTO) in 1995 potentially changed domestic policy dynamics. The WTO agreements reflect the trade policy concerns addressed in the Uruguay Round in the late 1980s and early 1990s. This article applies and adapts historical institutionalism to explain how international organizations may constrain and facilitate certain domestic policy options. It demonstrates that, while the WTO legal framework has become more receptive of environmental sustainability concerns, the social sustainability concerns that were increasingly entering the debate over biofuel policies were not easily accommodated, and this was seen as a constraint on the content of the European Union’s (EU) policy adopted in 2009. Only the environmental dimension of a broader concept of sustainability was included in the policy design.

Asset recombination in international partnerships as a source of improved innovation capabilities in China

Purpose This paper examines how multinational enterprises (MNEs) and local partners, including suppliers, customers, and competitors in China, improve their innovation capabilities through collaboration. We analyse this collaboration as a three-way interaction between the ownership-specific (O) advantages or firm-specific assets (FSAs) of the MNE subsidiary, the FSAs of the local partner, and the location-specific assets of the host location. Design/methodology/approach Our propositions are examined through a survey of 320 firms, supplemented with 30 in-depth case studies, based in mainland China. Findings We find that the recombination of asset-type (Oa) FSAs and transaction-type (Ot) FSAs from both partners leads to new innovation-related ownership advantages, or ‘recombinant advantages’. Ot FSAs, in the form of access to local suppliers, customers or government networks are particularly important for reducing the liability of foreignness for MNEs. Originality/value The study reveals important patterns of reciprocal transfer, sharing, and integration for different asset categories (tacit, codified) and different forms of FSA and explicitly links these to different innovation performance outcomes. The paper reports on these findings, making an empirical contribution in an important context (China-based partnerships). We also contribute to conceptual developments, connecting various kinds of FSA, tacit and codifiable assets and ‘recombinant advantages’. Limited conceptual, methodological, and empirical contributions are made in linking asset integration with (measurable) innovation performance outcomes in international partnerships.

Bringing export performance metrics into Annual Reports: the APEV scale and the PERFEX scorecard

Annual company reports rarely distinguish between domestic and export market performance and even more rarely provide information about annual indicators of a specific export venture's performance. In this study, the authors develop and test a new measure for assessing the annual performance of an export venture (the APEV scale). The new measure comprises five dimensions: (1) annual export venture financial performance, (2) annual export venture strategic performance, (3) annual export venture achievement, (4) contribution of the export venture to annual exporting operations, and (5) satisfaction with annual export venture overall performance. The authors use the APEV scale to generate a scorecard of performance in exporting (the PERFEX scorecard) to assess export performance at the corporate level while comparatively evaluating all export ventures of the firm. Both the scale and the scorecard could help disclose export venture performance and could be useful instruments for annual planning, management, monitoring, and improvement of exporting programs.

The RELQUAL scale: a measure of relationship quality in export market ventures

In this article, the authors develop a new measurement scale (the RELQUAL scale) to assess the degree of relationship quality between the exporting firm and the importer. Relationship quality is presented as a high-order concept. Findings reveal that a better quality of the relationship results in a greater (1) amount of information sharing, (2) communication quality, (3) long-term orientation, as well as (4) satisfaction with the relationship. The four multi-item scales show strong evidence of reliability as well as convergent, discriminant and nomological validity in a sample of British exporters. Findings also reveal that relationship quality is positively and significantly associated with export performance. Suggestions for applying the measure in future research are presented.

Globalization, new ecologies, new zoologies and the purported death of the eclectic paradigm

This paper provides a commentary to John Mathews' article in issue 23(1) of the Asia Pacific Journal of Management. I discuss how globalisation is fundamentally altering the milieu within which international business is conducted, and this new ‘ecology’ may indeed require scholars to consider a new ‘zoology’ of firms in the future. However, his specific suggestions are based on sparse evidence, and his alternative to the eclectic paradigm is founded on a misunderstanding of some fundamental concepts.